Yes they do... because each software package is tailor made to the specific needs of the retailer E-Future does business with. One nice thing about this company is the wide moat of protection they have. Retailers and distributors work for 1 year or more implementing the software, which involves costs well beyond the software product. As a result, E-Future has little-to-no customer churn.
Unfortunately, I have to agree.
This stock loves Press Releases just days before earnings... they've made a regular habit of it. And there is always some ex-employee looking to dump into the strength which always comes in pre-market trading.
Although this company may continue to post strong earnings results, at this point the stock has an exhaustive history of selling the news... and always with irregular trading to the upside in the pre-market.
This company appears to be legitimate... as far as legitimacy, I'm not concerned. What I do worry about is that the company is simply becoming a trading vehicle for manipulators either from inside the US or in China - who may be related to the company.
I would agree with not buying any more, but simply holding on to shares you currently own. Right now, it's hard to make sense of this company - there are so many conflicting events occuring and sourced information available that could be strung together to make a convincing bull or bear argument.
Hopefully the company doesn't give back these gains, but until Adam Yan can keep a CFO, there is going to be too much room to doubt management. (the last CFO was a real gem of a human being, I'm serious.. Sean was a great guy and had a very sincere, honest, caring way about him).
Current Backlog 29.9 Million USD vs. 18.8 Million USD year prior. 70% recognition this year.
Prospective Clients - 98 vs. 50-something last year... 8.8 million vs 5 million something.
Employee Headcount decreasing as efficiencies are gained.
You can still doubt China, but the time to do that was 4-5 years ago. The short game is over I believe. At some point, if E-Future continues to substantiate that it is not completely fraudulent, something has gotta give!
Kay, I tried to be civil. Sorry if you thought I took a pot shot at you, but in the future, don't be afraid to call the company to ask for some clarification. The Secretary and CFO are usually available to talk to and are very friendly and patient.
I like the fact that no information or research has been written about this company in years. It provides us a cause when we try to answer why this stock is stuck at these very low valuations.
Little EFUT is off everybody's radar. Most investors simply recognize it from it's glory days when it IPO'ed back in 2006 and stay away from it due to its association with speculation.
I also think that the company has a very positive relationship with its shareholders. I believe due to this positive relationship that they have displayed, it would be very uncharacteristic of E-Future to pull the carpet out from investors and buy the company for $4.50 to $5.00 a share.
If the SEC ever solidifies an agreement with the Chinese authorities regarding audit oversight and working paper sharing, and/or punitive measures taken against Chinese executives who defraud foreign investors, it would be the time to buy this hand over fist as the last uncertainties are removed.
I don't know, but I think you may be over-analyzing the situation. I think it's as simple as some people wanted to move on with their lives and there were other willing individuals to step and and fill those roles immediately.
Measurement and Balancer sales are very cyclical, and I would expect them to come back at some point. It's nice to see remote tank monitoring devices with some positive sales momentum. I think it's still possible to get some exponential growth there.
I bought in a few months ago and hold just a few thousand shares and the performance doesn't deter me from holding on to that small position. The reason is because small-caps are not performing across the board. The trade right now is just getting into anything liquid to avoid being punished by the Fed's easy money policy. The whole market is a joke and nothing seems to be valued based on long-term valuation principles. That will eventually change.
SMIT seems like a good gamble in the long-run as their cash burn rate is quite slow and gives them plenty of time to turn thing around. In a year, CEO and CFO will be more comfortable in their roles and the past will be the past.
Some of the recent comments about the settlement are very telling. Many of the long-term board members don't even understand the details surrounding the operations and present issues of the company. It leads me to believe that nobody is focusing on this company at all that has a reasonable understanding of the potential value here besides maybe 1-2 people.
The Microsoft lawsuit was settled for an undisclosed amount. It was less than 3.9 Million Renminbi. That was all that is known. It was probably settled considerably lower and the amount undisclosed as Microsoft wouldn't want other defendants aware of their bargaining power.
The lawsuit was filed against E-Future because they had a few individuals in the Wuhan office who were using unlicensed Windows and Office products. THey have 10 offices providing local customer service and local implementation teams and have over 800 employees. These thing are possible, especially in China. Microsoft has been making a lot of companies go to court and have been settling many similar claims, from what I am told. Note that the lawsuit had nothing to do with copying Microsoft' software and selling it as their own. This is a very important distinction that appears to be misunderstood by the crowd here.
Also E-Future doesn't much compete with Microsoft as they offer a niche, Chinese- Retail specific catered product that is individually customized for each retail client.
We don't know the final number, but I'll probably be able to figure it out with a few online web searches in Chinese.
You guys should sue the company.
The whole company was out of the office the whole time San Francisco Giants were in the World Series. That was likely paid for with company funds. The secretary who answered the phone was nasty and felt entitled to blow off a shareholder with a boatload of shares.
I sold back then at $3.10 to $3.15. I said back then it was just a salary vehicle for the Bates family. I was right then, and I'm right now.
Nobody was short, UNTIL YESTERDAY.
Plenty of shortable shares to start the day, but the retail masses think you can short anything Chinese for an easy payday. They will get wiped out unless they cover quickly. The earnings report was, categorically, very good.
Everybody is noticing the weak 1st quarter guidance. Clearly they didn't listen to the conference call. 2nd quarter will be better than last year's very strong 2nd quarter, while they expect further growth and margin expansion over the next 2 years as service revenue begins to increase on the margin growth.
You are shorting a company at 0.5 times sales in an environment where a multiple of 4x that (or 2x sales) would be on the cheap side.
Many people thing anything Chinese trading on the US exchanges is some kind of scam. This company is legitimate. Anybody who has put the effort into investigating this company, as I have for the last 5 years, has no doubt about that.
The earnings report wasn't poor. Please tell me exactly how it was poor, if you indeed believe what you are saying?
I may be wrong, but I'd guess we've hit the nadir in terms of volume.
The nice thing is that the stocks largest declines over the last few years have shown little selling conviction - very light volume on the downside.
98 prospective companies with a total contract value of over 50 million is pretty big news in my opinion!
If they announced the signing of each one, it may help the stock price, but the business is the same.
Good day today, no doubt!
Twitterverse is shorting EFUTURE. Bring it on!
They are going to have to cover and send this thing causing it to overshoot eventually. $10.00 is possible in the near term if the cards play out right.
It's all amateur hour on the short end. It doesn't get any better than that.
Doesn't seem like a smart seller. Just dumped onto the open market into strength. Perhaps dumb money. Really don't know who it could be, as their aren't that many shareholders remaining... E-Future keeps getting accumulated.
The only good news is the increase in volume allows the company to speed up their buyback.
Was really hoping we'd slowly move up to $5.00 and get back to where we were 2 years ago.
Totally disagree with 3rd quarter earnings being bad though Kay. They were great. Margins expanded broadly, and E-Future changed the way they recognized revenue recently, as they are only recognizing revenue upon completion, not at milestones on the way to to project completion. This means that contracts signed this quarter which would have previously been 33% recognized upon the signing thereof were not recognized at all.
Long term growth and satisfied customers tell a tale of a long term growth story in the making.
Another thing Kay... growth in China isn't easy at all. It's easy to grow and shrink your margins. It's actually better to stay where you are, build sustainably and increase your margins. Most chinese are playing a game of chicken with the margins... waiting to see which competitors fall first. E-Future is maintaining their price points, as they have leverage, and that's a great thing. They let a few competitors outbid them this year, knowing that the prospective clients may very well come back to them later.
At some point in the future, when China paranoia is a distant memory, E-Future will receive a valuation of at least 2-3x sales if not considerably more.
Right now at 2x sales, E-Future is a $13.50 company. At 3x sales, it's a $20.00 company.
If E-Future is able to grow at 25% next year, which they should given the contract growth in 2012, you can knock up those P/S ratio-valuations by 25%. Fair value next year should be $16.00-$24.00, but somehow I expect investors will be too scared to bid the price up that high - even though that's not a very aggressive price to estimate.
Stop advertising EFUT to these losers.
They deserve to lose their money here.
The last thing we need are momentum-ites chasing up EFUT with 200% unsustainable one day gains.
Non-Gaap - they are profitable.
If you include stock option compensation as an expense, they are not profitable yet.
On a cash flow basis, they are profitable already.